I have found that the allegations of child abuse against Christopher Lillie and Dawn Reed are untrue. In these libel proceedings it was part of the Review Team's defence that these allegations were true. That defence therefore fails.

I have concluded also that there is no basis for the Review Team's allegations in their Report of November 1998 ("Abuse in Early Years") about the existence of a paedophile ring involving Shieldfield children or their exploitation for pornographic purposes (see sections 8 and 9).

It was never part of the Newcastle City Council's defence that the allegations against Christopher Lillie and Dawn Reed were true. They took this stance, I was told, for tactical reasons. They are or were defending claims for compensation by parents over the abuse alleged to have been suffered while in their care. In those proceedings the City Council were making no admission that such abuse had taken place and could not, therefore, be seen to be making inconsistent allegations in the libel actions. They nevertheless fully indemnified the Review Team in the conduct of their case.

The City Council preferred to rely on the defence of qualified privilege on various grounds. I have upheld their defence of privilege. The Claimants argued that certain named officers and the leader of the Council were maliciously motivated in arranging the publication of the Review Team's Report in November 1998. I heard evidence from all those individuals and rejected the claim that any of them was malicious. Accordingly, the City Council is entitled to judgment (see sections 14 and 15).

The Review Team also raised qualified privilege as a defence. Those four Defendants were engaged by the City Council in 1995 to carry out a review as to what went wrong at Shieldfield and to respond to parents' individual complaints/allegations against various individuals or departments within the City Council. They looked into matters for three years and were paid, I was told, well over £350,000 for their work. They and the City Council took legal advice with a view to ensuring, so far as possible, that when their conclusions were published they would all be protected by the defence of qualified privilege if sued for libel.

The Review Team delivered their Report in accordance with their contractual obligation to the City Council on 6 November (via the Chief Executive). That limited publication was protected by qualified privilege at common law (see sections 10 and 11).

It is true that the Review Team stipulated that no elected member of the City Council was to see the Report prior to publication to the wider public on 12 November 1998. That may seem odd, since it was the City Council who hired them to inquire and report. Nevertheless, I am satisfied that a meeting of a Council committee (albeit a brief and purely formal one) was duly called and constituted for 10 a.m. on 12 November and that the Report, which was formally "received" by the Committee, was thereafter published in such a way as to attract the very wide privilege accorded by the Local Government Act 1972 (as amended). Although the Review Team were responsible for the wide dissemination of their Report through that channel, they too would be entitled to take advantage of that protection by way of privilege (see sections 14 and 15).

Unfortunately, however, I have also held that the four members of the Review Team were malicious in the promulgation of their Report. They have thus forfeited their protection in respect of the limited publication of the Report on 6 November and the much wider publicity it attracted thereafter. That is because they included in their Report a number of fundamental claims which they must have known to be untrue and which cannot be explained on the basis of incompetence or mere carelessness (see sections 12 and 13).

Accordingly, the Claimants are each entitled to judgment against the Review Team. The allegations made against them were of the utmost gravity and received sustained and widespread coverage. I decided, therefore, that each Claimant was entitled to what is now generally recognised to be the maximum amount for compensatory damages in libel proceedings. I award each of them £200,000 (see section 16). What matters primarily is that they are entitled to be vindicated and recognised as innocent citizens who should, in my judgment, be free to exist for what remains of their lives untouched by the stigma of child abuse.

Although the City Council is entitled to judgment, I wish to make clear that the terms on which the Review Team was appointed and the methodology they adopted were wholly unsuited to the task they were eventually required by the City Council to perform. The Claimants had been acquitted of charges in respect of some of the Shieldfield children in July 1994 and it was originally stipulated, therefore, that the Review Team should "not make any finding on matters dealt with by the criminal court".

Despite this they, in effect, found them guilty of serious sex offences (including rape) not only in respect of the very children involved in the 1993-1994 criminal charges but also in respect of countless others (sometimes put at about 60 and on other occasions up to 1450). They were encouraged in this folly by the Council including through officers with legal qualifications. The result was that they proceeded to make their findings without any of the elementary safeguards being accorded to the two citizens in jeopardy.

For example, the "accused" were not notified of exactly what was alleged against them, or told what the evidence was, or given an opportunity of testing it or responding. They were invited to come and speak to the Review Team but were not given any indication of what they would be asked about (despite a request through solicitors), and Mr Lillie was told falsely that they would not be re-visiting the criminal charges of which he had been acquitted. Inevitably, they were advised to have nothing to do with it.

When the Review Team had made their findings, neither Claimant was forewarned of the conclusions or when they were to be published. They were left to learn of the allegations through the media.

Although parents had been calling for a public inquiry in 1994, their legal advisers were pressing for procedures compliant with the principles of natural justice. That was clearly right, but the Council allowed the team to proceed as they thought fit, and natural justice seems to have fallen by the wayside.

I characterised these arrangements in a ruling in February as a "shambles". That still seems to me to be an apt description. The fault cannot be laid entirely at the door of the Review Team since none of them was legally qualified, and I concluded at an early stage that it was mainly the Council's fault for sanctioning an inquiry into the commission of acts tantamount to criminal offences, with a view to the ultimate publication of a report, but without appropriate safeguards for the "accused". The exercise has cost a vast amount of money for the citizens of Newcastle and I have no doubt years of unnecessary heartache for many of those directly involved. Unhappily, the Council has only itself to blame.